GST Ready India

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GST rate cut on restaurants from today: Eating becomes cheaper; here’s what you need to know

Nov 15, 2017

Restaurants to levy 5% GST from today, food bills likely to come down

With the Goods and Service Tax (GST) levy on both AC and non-AC restaurants coming down to 5 per cent from today, dining out is expected to get a lot more cheaper. The GST Council, in its 23rd meeting in Guwahati, had slashed the tax rate from 18 per cent to just 5 per cent. However, restaurants will not be able to take the benefit of input tax credit (ITC). Liquor, however, will attract state levies like VAT as it was kept outside the GST regime.

The new tax structure for restaurants, which is being implemented from November 1, comes days after the Finance Minister Arun Jaitley expressed his displeasure over eateries not passing on the benefit of input tax credit to restaurant-goers. Click to read more

GST at 5% for restaurants: Eating out will become cheaper for now, but expect eateries to hike prices in future

Eating out and ordering takeaways will now set you off only 5 percent by way of tax instead of the earlier 18 percent (if ordered from AC restaurants) and 12 percent (non-ac restaurants). Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied at 18 percent GST (Goods and Services Tax) but input tax credit (ITC), a facility to set off tax paid on inputs with final tax, is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge at 5 percent GST but will not get ITC. Click to read more

GST rate cut on restaurants from today: Eating becomes cheaper; here’s what you need to know

Eating out and ordering takeaways at restaurants all over the country will become cheaper from today as only 5 per cent tax will be levied. Earlier, it was 18 per cent (if ordered from AC restaurants) and 12 percent (non-ac restaurants).

For example, a customer used to pay 18 per cent GST for a cup of tea say costing Rs. 50, used to bring the total bill to Rs. 59. Now, the same customer, at 5 per cent GST, will pay a total bill of Rs. 52.5. Click to read more

Further pruning of rates possible: GST Council member

After reducing the Goods and Services Tax (GST) rates on many items of daily consumption, the Council may further prune the GST rates on goods depending on the revenue buoyancy, Assam Finance Minister Himanta Biswa Sarma said on Tuesday.

Sarma, one of the members of the GST Council, also said the deliberations on tax rates relating to handicrafts, handloom and inclusion of real estate in the new indirect tax regime would be taken up at the next meeting scheduled for January-end next year. Click to read more

Moving towards a more effective GST

The overdue transition to the new goods and services tax (GST) has started off on the wrong foot. The three main problems have been the complicated tax structure that can create distortions, onerous compliance procedures that have created working capital stress in many smaller companies, and technical glitches in the GST network.

This newspaper had commented a year ago that India was moving towards a flawed GST. One part of the flawed start can be explained by political realities. The complicated federal bargaining in the GST council led to a system of five tax rates, along with a special rate for gold, as well as cesses that go against the very basic principles of value-added taxation. Click to read more

Make GST people-friendly

Politics is about power, the relationship between the state and the citizen, the more powerful and the less powerful.

Tax is a primal expression of the state’s power over the citizen. To evade tax is to both defy the state and enfeeble it, eroding the state’s legitimacy. The politics of the goods and services tax matters, beyond parties.

Tax too little, the state is left with too little resources to finance the citizens’ collective well-being; tax too much, invite popular rebellion, which, in a democracy, takes the form of the ruling party being voted out. Click to read more

Buying groceries? Make sure to check GST ‘discounts’

From Wednesday, consumers would do well to check their shopping bills closely. A host of packaged products such as chocolates, toothpastes, shampoos and shaving creams – with the maximum retail price printed on them – is set to become cheaper following a steep reduction in the goods and services tax.

Some companies manufacturing these products have asked traders to pass on the tax cuts to consumers immediately, without waiting to put revised maximum retail price stickers on them or printing new packs, both of which would take time. Click to read more

After teething pain, MSMEs stand to gain under GST

The implementation of the goods and services tax (GST) effective 1 July 2017, has understandably put micro, small and medium enterprises (MSMEs) in a spot of bother. Together with demonetisation, GST appears to have irreversibly altered the market dynamics for these units.

In the earlier tax regime, entities with a turnover of Rs1.5 crore per annum were exempt from payment of excise duty. That threshold has been lowered to Rs20 lakh for most states under GST. Furthermore, job work units, which were previously not liable to pay taxes, have been brought under the GST net, leading to a disruptive impact on industries such as textiles and gems & jewellery where job workers are an integral part of the supply chain. Click to read more

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